TRG | The Bottom Line – 11/14

This week was marked by AI headlines in both positive and negative directions. On the positive side, commentary from earnings calls and conferences has largely been positive in our view with a long runway for data center buildout. On the negative side, AI related names have been pressured throughout the week as the market continues to weigh what is real and if prices have run ahead of demand for certain sectors. Scion Asset Management announced plans to close up shop after revealing a short trade against the AI theme, which will turn out to be either a really good idea or really bad idea. TRG maintains the view that the AI build out and reindustrialization is real and has many years of demand ahead. We published this week broad commentary across our coverage universe that paints a picture of ongoing demand. Coverage company TIC Solutions (TIC) also reported earnings this week that highlighted the opportunity set ahead across AI and reindustrialization demand. As pure play AI related stocks remain volatile, we continue to look for the steady winners that benefit from these trends without being overleveraged or capex heavy, and TIC is one company that fits this category.